What can you do with your Trade Mark: transfer or licence?

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Trademarks are an important component of your intellectual property. When selling businesses or collaborating with other partners, you may be required to transfer and share ownership of the assets. You must handle this transfer carefully to protect your interests.

This article covers what trademarks are, how to transfer them – locally and internationally, and the difference between licensing assets and assigning them.

What is a Trade mark?

A trademark is a unique sign or marker used to identify businesses as well as the business’ offerings of goods and/or services. The marks are more commonly the trade name, the logo of the company but can also be slogans, images and visuals or any sounds associated with the brand.

Trademarks are important as they help to cement the brand identity and recognition as the business starts to expand. It helps customers to identify your brand as the mark is used exclusively for the offerings you have registered under them. Additionally, having one protects you legally from infringement by others on your intellectual property.

Transfer Your Trade mark

Transferring your trademark is also technically referred to as an assignment or transmission of the trademark. This means handing over the ownership of the intellectual property and assets to another owner. This owner can be a family member, a business or a business partner.

The transfer can be a partial or full assignment based on the purpose of the change in ownership. For example, if you owned trademarks for chocolates, gift items and stationery, you could choose to partially assign the mark to another entity to use only for stationery items. This way you would retain the ownership of the mark for the gifts and chocolates.

Regardless of whether the transfer is full or partial, it is important to follow the correct procedure.

  1. The registered owner of the trademark or the person who is being assigned the mark must apply to the registrar to record the transfer.
  2. The application needs to be in the approved form (as specified on IP Australia). All relevant documentation must be attached to the application.
  3. The registrar will record and publish the particulars of the assignment.
  4. The day after the assignment is recorded, the transfer is complete.

Licensing a Trade mark

You may choose to licence your trademark instead of assigning it as part of a marketing strategy when collaborating with other partners. This involves giving the other party permission and rights to use the mark in compliance with the terms and conditions agreed upon in the licensing agreement.

The licensing agreement can detail when and where the trademark can be used and which ones can be used in particular situations. Licensing models become integral for franchise businesses where franchisors licence the use of their trademarks to multiple franchisees. In these cases, the franchisees have a stricter code and agreement to abide by which details the use of all the assets licensed by the franchisor.

There are three types of IP licences issued in Australia.

  • Exclusive licence – the licensee gets rights to use the trademark in exclusion of the others, including the licensor.
  • Sole licence – the licensor grants the licensee the right to use the trademark and both have rights.
  • Non-exclusive licence – both licensee and licensor have rights to use the trademarks. Additionally, the licensor can grant rights to other third parties to use the trademark.

Documents You May Need

For the transfer, the assignment request forms are available on IP Australia. This form will require the following details:

  • Full name and address of the new owner.
  • Names, and signatures of all the current co-owners. (in case of a co-owner, not being present, their consent should be provided for the transfer to go through).
  • Details and numbers of the trademarks being assigned.
  • Clear specifications of whether there is a full or partial assignment.

You might also need some additional documents to support your application. The commonly required documents are the following:

  1. Deeds of assignment;
  2. Letters of assignment;
  3. Sales agreements.

All supporting documents must be dated and signed by both the previous and new owners of the trademarks. They should include details of the IP assets being assigned, as well as specifics about the full or partial transfer of ownership.

Transferring Unregistered Trade marks

The process of transferring registered and unregistered trademarks is the same except for one element. For an unregistered trademark to be eligible for transfer, it must have goodwill. Goodwill refers to the reputation and recognition that the brand has built through its name or mark. Goodwill adds to both registered and unregistered marks but is more important for the latter. Goodwill is what makes the mark valuable without which the mark just becomes a generic sign.

Transferring International Trade marks

The Madrid Protocol enables the transfer of international trademarks that have been filed previously. All goods and services that are covered by international registration can be transferred to the new owners. However, you need to ensure that they are eligible for ownership and belong to countries covered by the Madrid system.

The current or new owners can apply for a change in ownership recorded in the International Register. The transfer is requested through the MM5 form and is lodged directly with the International Bureau. The fees for the transfer are also paid directly to the Bureau.

The MM5 form should cover the following:

  • Details of the new owners and whether they fulfil the relevant criteria – specifics of their commercial establishment, residence, and nationality.
  • Whether the new owner has the required connection to the designated regions/countries.

Key Takeaways

  • Trademarks are valuable commercial assets, so it is imperative to ensure the transfer takes place smoothly.
  • A change in ownership needs to be communicated to IP Australia to protect your interests.
  • To ensure a smooth transfer, make sure that you have all the documentation and information in place.
  • In the case of transferring unregistered trademarks, IP Australia need not be informed.
  • For transferring international trademarks, follow the guidelines in place by the Madrid system.

Need a Lawyer?

Dealing with and negotiating transfers of trademarks and other IP assets can be tricky. Before you start the process, it is important to conduct your due diligence regarding the new owners and co-owners. Additionally, you may require detailed and well-crafted licensing agreements to safeguard your assets and commercial interests.

An expert IP lawyer can help you register your IP assets, protect them and tackle any paperwork and applications required when transferring or licensing them. They can also aid you in negotiating deals that protect and serve your business interests and protect you from any legal concerns that may arise later. If you are looking for an IP lawyer to help you with an IP asset transfer or looking for business lawyers to consult for your business, the solicitors at Lazarus Legal are present to meet all your legal needs. Connect with them today to discuss your legal concerns.

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Mark Lazarus

Mark Lazarus

Mark Lazarus, the visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.

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What can you do with your Trade Mark: transfer or licence?